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Gold Extends Recovery After Disappointing US Manufacturing DataGold prices edged higher to start July, with the US dollar suffering on the back of disappointing manufacturing sector data. At the time of writing, the spot price, XAU/USD, is trading at the $1,920 zone, 0.10% above its opening price, extending last week's bounce from three-month lows of sub-$1,900 an ounce. US markets closed early on Monday and will remain closed on Tuesday in observance of Independence Day. Still, the Institute for Supply Management (ISM) released its manufacturing sector PMI, which unexpectedly dropped to 46 in June, the lowest level since May 2020, pointing to sustained contraction in the sector. The weaker-than-expected figures weighed on US yields and the dollar. Gold peaked at $1,931 an ounce before easing. After the Fourth of July holiday, attention will turn to Friday's US nonfarm payrolls report. The economy is expected to have added 200,000 new jobs in June, following the astounding 339,000 hires of May. From a technical perspective, the XAU/USD pair maintains a short-term negative bias, according to indicators on the daily chart, as the price consolidates below the 20- and 100-day simple moving averages (SMAs), which completed a bearish cross last week. As so, the 20-day SMA offers immediate resistance at the $1,935 zone, followed by the 100-day SMA at $1,945. A break above the latter would improve the technical outlook, aiming at a retest of the $2,000 level. On the flip side, the next support levels are seen at $1,900 and last week's low of $1,893.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Drops Below 1.0900, Attention Turns To US Inflation DataThe EUR/USD pair came under pressure on Thursday and broke below the 1.0900 level to touch its lowest level in six days following the release of better-than-expected US data and another round o hawkish comments from the Fed Chair. At the time of writing, the EUR/USD pair is trading at the 1.0875 area, 0.36% below its opening price, posting its second daily decline in a row. Data from the US fueled the narrative that the economy remains resilient and helped to lift the dollar during the New York session. First-quarter annualized US Gross Domestic Product (GDP) growth was upwardly revised from 1.3% to 2%. Meanwhile, initial jobless claims dropped to 239,000, the lowest level in four weeks. The Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, will be released on Friday. Moreover, Federal Reserve Chairman Jerome Powell echoed recent hawkish comments during a speech in Madrid on Thursday. He noted that even though inflation has moderated somewhat, the process of getting inflation back down to the 2% target still has a long way to go. From a technical perspective, the EUR/USD short-term bias looks neutral to slightly bullish, according to indicators on the daily chart, which have turned south but remain in positive territory. With the price losing the 1.0900 area, the next critical support is seen at the 20-day simple moving average (SMA) at around 1.0840, followed by the 100-day SMA at 1.0815. On the other hand, the 1.0900 level remains a key short-term threshold, followed by weekly highs in the 1.0970-80 region and the 1.1000 psychological level.
by Alex_Boltyan_FXAnalyst
Gold Hits Lowest Level In Three Months, Threatens $1,900 SupportGold prices dropped for a second day in a row on Wednesday as recent (but not new) hawkish comments from Federal Reserve Chair Jerome Powell boosted the US dollar weighing on the yellow metal. At the time of writing, spot gold price, XAU/USD, is trading at $1,912 an ounce, just below its opening price, after hitting a three-and-a-half-month low of $1,902 earlier on the day. Speaking at the European Central Bank (ECB) Forum on Central Banking, Fed's Powell noted that while the United States is vulnerable to a recession, the chances are slim. Regarding interest rates, Powell said that he would not rule out back-to-back rate hikes. "Although policy is restrictive it may not be restrictive enough and it has not been restrictive for long enough," he added. Hawkish comments from Powell reignited USD strength, pressuring the yellow metal that struck its lowest level since mid-March before trimming losses. From a technical perspective, the XAU/USD pair holds a mildly bearish short-term bias, although it has managed to keep above the critical $1,900 area. While the RSI and the MACD indicators are in negative territory, the 20- and 100-day simple moving averages (SMAs) are completing a bearish cross. The metal would need to recover above $1,943 (SMAs crossover level) to ease the immediate pressure and target a steeper bounce to the $1,970 area. On the other hand, the loss of the $1,900 mark would add further pressure on the price, with the following significant support seen at the 200-day SMA at the $1,855 zone.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Targets 1.1000 As Short-Term Outlook ImprovesThe EUR/USD pair advanced considerably on Tuesday and approached the 1.0970 resistance area underpinned by hawkish comments from European Central Bank (ECB) President Christine Lagarde, while the improved market mood also kept the dollar under pressure. At the time of writing, the EUR/USD pair is trading at the 1.0960 zone, up 0.52% on the day, after reaching a five-day high of 1.0977. Speaking at the European Central Bank Forum on Central Banking 2023 in Sintra, Portugal, Lagarde said the ECB would have to bring rates to "sufficiently restrictive" levels and keep them there "for as long as necessary" as "inflation in the euro area is too high and is set to remain so for too long." Additionally, the improvement in market sentiments, evidenced by rising stocks, has fueled the EUR/USD advance. Main stock indexes are trading in the green in Wall Street, while European stocks snapped a six-day declining streak. Data from the Conference Board showed US consumer optimism jumped to a 17-month high of 109.7 in June amid fewer worries about a recession. From a technical perspective, the EUR/USD short-term outlook has improved according to indicators on the daily chart, while the price holds up above the critical 1.0900 support zone. A break above the 1.0970 highs could underpin a steeper rally, targeting 1.1000 en route to the 1.1070 area. Conversely, the loss of 1.0900 would deteriorate the short-term scenario, exposing the next support area at the 1.0815-30 region, where the 20- and 100-day simple moving averages (SMA) lie after completing a bullish cross.
by Alex_Boltyan_FXAnalyst
Gold Recovers From Three-Month Lows But Lacks MomentumGold prices edged slightly higher on Monday after visiting three-month lows last week, as investors continue to reassess monetary policy expectations following hawkish hints from the Federal Reserve. At the time of writing, the spot price, XAU/USD, is trading at the $1,923 an ounce zone, just a few bucks above its opening price, having retreated from a daily peak of $1,933. The shift of expectations regarding the Fed's next steps put the yellow metal under pressure last week, with the XAU/USD price sliding to its lowest level since March at $1,912. The Federal Open Market Committee (FOMC) decided to skip a rate hike after ten consecutive increases earlier this month, but the dot plot showed members are now expecting two more hikes this year. This hammered expectations that the Fed was pivoting to a more dovish stance and probably planning on a rate cut or two. Last week, Chair Jerome Powell testified before the US Congress, echoing the hawkish rhetoric, which boosted the dollar and weighed further on gold prices. With the start of a new week, the metal bounced from recent lows amid a risk-off environment but continues to seesaw on USD dynamics. Attention now turns to US Personal Consumption Expenditure (PCE) price index data, the Fed's preferred inflation gauge, which will be released on Friday. From a technical perspective, the XAU/USD pair holds a short-term negative outlook, according to indicators on the daily chart, although the broader picture remains constructive. The immediate resistance area is seen at the $1,945-50 zone, where the 20- and 100-day simple moving averages (SMAs) converge. A break above this area could ease the immediate pressure targeting the $1,970 level en route to $2,000. On the flip side, Friday's three-month low of $1,910 is the first support area, followed by $1,890 and $1,870.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Pulls Back From Six-Week Highs As Powell TestifiesThe EUR/USD pair retreated on Thursday after hitting six-week highs during the European session amid a broad-based dollar pullback. However, the US currency bounced at the beginning of the New York session after Federal Reserve Chair Jerome Powell's second-day testimony before the US Congress. At the time of writing, the EUR/USD pair is trading at the 1.0965 zone, 0.2% below its opening price, having struck its highest level since May 8 at 1.1013. During his testimony before the Banking, House and Urban Affairs Committee in the US Senate, Powell reiterated that the central bank still has a long way to go and reassured that monetary policy is not becoming less effective in combating inflation. He also backed what the dot plot showed last week, the Federal Open Market Committee (FOMC) broadly feels "it will be appropriate to raise rates again this year and perhaps two more times." His hawkish remarks boosted US yields and helped the greenback to make a U-turn and reverse daily losses. From a technical perspective, the EUR/USD pair holds a short-term positive bias according to indicators on the daily chart, while the 20- and 100-day simple moving averages (SMAs) are close to completing a bullish cross. On the upside, the 1.1000-10 zone stands as the immediate resistance level, followed by 1.1070 and the 1.1100 level. On the downside, the 1.0900 area stands as immediate support, followed by the critical short-term level given by the convergence of the 20- and 100-day SMA at the 1.0810 zone.
by Alex_Boltyan_FXAnalyst
Gold Extends Losses and Hits Three-Month LowsGold price extended its decline on Wednesday, charting the fourth red daily candle in a row, as the yellow metal struggles to find demand following the Federal Reserve's hawkish skip last week. At the time of writing, the spot price, XAU/USD, is trading at the $1,930/oz area, 0.30% below its opening price. Investors continue to assess last week's Fed decision as chair Jerome Powell testifies before the US Congress at the semi-annual monetary policy report. The Federal Open Market Committee (FOMC) voted unanimously to skip a rate hike, although the dot plot showed policymakers are leaning toward two more rate increases this year. At the congressional hearing, Powell reiterated that the Fed is very far from its inflation target of 2% while highlighting it may make sense to move rates higher at a more moderate pace. Hawkish expectations have weighed on gold prices even though US yields have been moving back and forth over the last sessions. From a technical perspective, the XAU/USD pair's short-term bias is skewed to the downside, as shown by indicators on the daily chart. The price has fallen below the 20- and 100-day simple moving averages (SMAs) and struck a three-month low of $1,919, supporting the negative outlook. On the downside, the following supports could be found in the $1,900-$1,885 area ahead of the 200-day SMA at around $1,850. On the flip side, recovery of the $1,940-50 zone could lead to a retest of the $1,970 resistance zone ahead of the $2,000 psychological level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Extends Pullback From Monthly Highs, Holds Up Above 1.09The EUR/USD pair is moving a tad lower on Tuesday after two consecutive daily declines as US traders return to their desks following Monday's holiday. At the time of writing, the EUR/USD pair is trading at the 1.0920 zone, a few pips below its opening price, having pulled back from a daily peak of 1.0946 struck during the European session. The euro benefitted in the aftermath of the Federal Reserve and the European Central Bank (ECB) monetary policy decisions. Whereas the first skipped a rate hike after ten consecutive raises, the latter delivered a 25 basis point increase as expected. Against this backdrop, the EUR/USD climbed to its highest level in a month at 1.0970 on Friday and has been edging slightly lower ever since, still managing to hold up above the 1.0900 critical level. On Tuesday, US investors rejoined the markets. The US Census Bureau released housing starts data which showed an increase of 21.7% in May, much better than the 0.8% decline expected. Market participants will be watching Federal Reserve President Jerome Powell's testimony before both chambers of the US Congress on Wednesday and Thursday. Other Fed speakers will be crossing the wires this week and could offer signs of whether the central bank will proceed with further rate increases after the dot plot showed most Federal Open Market Committee (FOMC) members expect two more hikes this year. From a technical perspective, the EUR/USD short-term outlook remains skewed to the upside according to indicators on the daily chart, although momentum has faltered over the last sessions. A break above last week's high of 1.0970 could pave the way toward the 1.1000 psychological level on track to the 1.1070 resistance area. On the flip side, the loss of the 1.0900 level could add short-term pressure exposing the 100-day simple moving average (SMA) at the 1.0810 zone.
by Alex_Boltyan_FXAnalyst
Gold Prices Consolidate After Eventful WeekGold prices trade little changed on Monday as investors continue to ponder last week's central banks' decisions while US markets are closed in observance of the Juneteenth holiday. At the time of writing, the spot price, XAU/USD, is trading at the $1,950/oz area, 0.29% lower on the day. From a broader perspective, the XAU/USD has spent the last few weeks in a consolidative pattern between the 100-day SMA and the $1,985 zone. On Wednesday, Federal Reserve Chair Jerome Powell will testify on monetary policy before US Congress, which could shed some light on the Fed's mindset and trigger some reaction on USD pairs. The Federal Open Market Committee (FOMC) decided to skip a rate hike last week for the first time after ten increases, while the dot plot hinted at two more rate raises. For the July meeting, a rate increase is over 70% priced in. Fed speakers will have their chance to fully convince markets in the coming weeks. Elsewhere, US bond and stock markets remain closed on Monday and will resume activity on Tuesday. From a technical perspective, the XAU/USD pair's short-term outlook remains slightly bullish, although rangebound trading has left indicators flat on the daily chart, showing a lack of momentum. On the upside, the yellow metal needs to consolidate above the top of the range at the $1,985 area en route to the $2,000 level. Beyond, the record highs at the $2,070-75 zone will come back into play. On the other hand, the loss of the 100-day SMA, currently at $1,940, would expose the $1,925 horizontal support ahead of the $1,900 area.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Posts Weekly Gain in the Fed And ECB AftermathThe EUR/USD pair reached a fresh one-month high on Friday and is headed to post its second weekly advance in a row following the Federal Reserve (Fed) and the European Central Bank (ECB) decisions on monetary policy. At the time of writing, the EUR/USD pair is trading at the 1.0925 area, slightly down on the day but on track to post a 1.7% weekly advance. On Thursday, the European Central Bank (ECB) announced its decision to raise its main rates by 25 basis points and offered a hawkish stance as President Christine Lagarde said the board is "not thinking about pausing." A day before, the Federal Reserve decided to skip a rate increase but kept the hawkish rhetoric, diminishing prospects of rate cuts for the remainder of the year. Next week, Powell will testify before the US Congress. Overall, the euro benefited from the central banks' aftermath, rising over 100 pips over the last two days. From a technical perspective, the EUR/USD pair holds a short-term bullish bias, according to indicators on the daily chart, giving no signs of exhaustion yet. At the same time, the price is closing the week above its main moving averages. The outlook is also bullish on the weekly chart, although indicators show tamer momentum. On the upside, the EUR/USD pair could face the next resistance level at 1.0970 and 1.1000 ahead of April and May's monthly highs at the 1.1095 zone. On the other hand, supports are seen at the 100-day simple moving average (SMA) at 1.0805 and the 20-day SMA at 1.0760. Loss of this level would expose the 1.0700 level.
by Alex_Boltyan_FXAnalyst
EUR/USD Challenges 1.0900 After ECB Delivers Rate HikeThe EUR/USD pair extended gains into a fourth consecutive day on Thursday following the European Central Bank's (ECB) decision to raise its main rates by 25 basis points, as expected. At the time of writing, the EUR/USD pair is trading at the 1.0880 area, recording a 0.7% daily gain, having touched its highest level in a month at 1.0894. The European Central Bank announced its decision to raise the main financing rate to 4.00%, the marginal lending to 4.25% and the deposit facility rate to 3.50%. In the subsequent speech, ECB President Christine Lagarde fueled the hawkish narrative as she stated the board is "not thinking about pausing." Meanwhile, the Federal Reserve decided to skip a rate increase on Wednesday after ten consecutive increases. However, the dot plot and Chair Jerome Powell's hawkish words slammed prospects of rate cuts for the remainder of the year. From a technical perspective, the EUR/USD pair's short-term bias is bullish, according to indicators on the daily chart, while the price has managed to climb back above the 20- and 100-day simple moving averages (SMAs) and now challenges the critical 1.0900 resistance area. A break above the psychological level could fuel bullish momentum and send the EUR/USD to retest the 1.0970 resistance zone ahead of 1.1000. On the other hand, the 100-day SMA at around 1.0805 is the key support to watch as a drop below would deteriorate the short-term outlook, exposing the 1.0700 zone en route to May's lows at 1.0635.
by Alex_Boltyan_FXAnalyst
Gold's Recovery Falters After Fed's Hawkish SkipGold prices fell sharply and erased intraday gains following the Federal Reserve's decision to skip a rate hike on Wednesday. At the time of writing, the spot price, XAU/USD, is trading at the $1,945 area, little changed on the day, having pulled back from an intraday peak of $1,960 an ounce. The Federal Open Market Committee (FOMC) announced its decision to maintain the target range for the federal funds unchanged at 5.00%-5.25% following ten consecutive hikes. Although the (unanimous) decision was widely anticipated on the back of cooler inflation figures for May, the dot plot and Chair Jerome Powell's speech offered a hawkish message and boosted the US dollar. The Fed economic projections showed that most FOMC members anticipate the terminal rate to reach the 5.50%-5.75% range. At the presser, Powell noted that risks of overdoing and underdoing are closer to being in balance and highlighted that rate cuts wouldn't be appropriate this year. This hawkish stance boosted US Treasury yields across the curve, with the 10-year yield rising from 3.78% to 3.85% and the 2-year from 4.64% to 4.80%. The US dollar strengthened, and Gold took a hit as higher interest rates increase the metal's opportunity cost while reducing the demand as a hedge against inflation. From a technical perspective, XAU/USD holds a short-term bearish bias according to indicators on the daily chart. A loss of the 100-day simple moving average (SMA) at $1,940 would expose the $1,900 area. On the other hand, a recovery past the 20-day SMA at the $1,960 area is needed to improve the short-term outlook, aiming at the $2,000 level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
Gold Remains On The Back Foot Ahead Of Fed DecisionGold prices edged lower for a third day in a row on Tuesday, even though lower-than-expected US inflation data cemented expectations that the Federal Reserve will refrain from hiking rates on Wednesday. At the time of writing, gold spot price, XAU/USD, is trading at the $1,945/oz area, 0.59% below its opening price and printing the third daily decline in a row. The US Consumer Price Index (CPI) rose by 0.1% in May, below the expected increase of 0.2%. The annual inflation rate eased from 4.9% to 4.0%, hitting the lowest level in over two years. The Core CPI advanced 0.4%, in line with expectations, and the YoY rate slowed down to 5.3% in May from 5.5% in April. Although as the knee-jerk reaction US yields tumbled, weighing on the greenback, they've regained the composture with 2-, 5- and 10-year yields quoting above their opening levels during the American afternoon. On Wednesday, the Federal Reserve will announce its monetary policy decision and update economic projections. Following the latest series of US economic data, markets expect the central bank to remain on hold this meeting, keeping the federal fund target range at 5.00%-5.25%, and resume rate increases at the July meeting. From a technical perspective, the XAU/USD pair holds a short-term slightly bearish bias, according to indicators on the daily chart, while the price is testing critical support at the 100-day simple moving average (SMA) at around $1,940. The loss of this level would point to further declines targeting the $1,900 level. On the other hand, a recovery of the 20-day SMA at $1,960 would ease the immediate pressure and pave the way to a retest of the $2,000 psychological level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Remains Capped Below 1.0800 Ahead of US CPI, Fed VerdictThe EUR/USD pair shows no directional bias at the start of an eventful week as investors refrain from taking significant positions ahead of the United States consumer inflation data (Tuesday) and the Federal Reserve monetary policy decision (Wednesday). At the time of writing, the EUR/USD pair is trading at the 1.0750 zone, virtually unchanged on the day, having pulled back from an intraday peak of 1.0790. The Federal Open Market Committee (FOMC) kicks off its two-day policy meeting on Tuesday and will announce its verdict on Wednesday. This meeting has been highly anticipated as the Fed is expected to pause its tightening cycle after ten consecutive rate increases. According to the CME FedWatch Tool, the probability of the Fed staying on hold is above 75%. However, for the July 26 meeting, there is an over 50% chance the central bank will deliver another 25 basis points rate increase. Before the Fed announces its decision, the US will release May Consumer Price Index (CPI) figures, which are expected to show the annual inflation rate to ease to 4.2% while the core rate is increasing to 5.6%. From a technical perspective, the EUR/USD pair holds a neutral to slightly bearish short-term bias according to indicators on the daily chart. At the same time, the price remains capped below the 100-day simple moving average (SMA), offering resistance at 1.0805 and currently struggling around the 20-day SMA. Failure to consolidate above the 1.0750 area would add bearish pressure exposing the 1.0670 zone ahead of the May monthly low of 1.0635.
by Alex_Boltyan_FXAnalyst
Gold Posts Second Weekly Gain Ahead of Fed's VerdictGold prices pulled back slightly on Friday but posted the second weekly gain in a row as expectations that the Federal Reserve will pause rate increases continued to take a toll on the US dollar. At the time of writing, the spot price, XAU/USD, is trading at the $1,960/oz area, down 0.23% on the day but posting a 0.65% weekly advance. The greenback is torn between mounting expectations that the Fed will maintain the fed funds target range steady at 5.00%-5.25% at next week's meeting but will raise rates by 25 bps at the next meeting. According to the CME FedWatch Tool, the probability of the Fed hiking rates in July is above 50% following the Reserve Bank of Australia and the Bank of Canada's unexpected increases announced this week. But before the Fed announces its verdict on Wednesday, the US will release the May consumer price index (CPI) figures on Tuesday. Investors expect the annual inflation rate to decrease to 4.2% while the core rate is increasing to 5.6%. Both events have the potential to trigger USD swings. From a technical perspective, the XAU/USD pair maintains a neutral to slightly bullish short-term bias according to indicators on the daily chart, while the price is closing just above the 20-day simple moving average (SMA). On the weekly chart, the outlook remains bullish, with the 20-week SMA acting as critical support in the $1,940 area. A loss of this level could deteriorate the medium-term outlook for the yellow metal.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Surges Towards 1.0800 as Weak US Dollar Spurs RallyThe EUR/USD pair posted solid gains on Thursday as the US dollar weakened across the board following softer-than-expected US jobs data. At the time of writing, the EUR/USD pair is trading at the 1.0780 area, marking a 0.78% daily increase and its second consecutive advance. The US dollar faces pressure as speculations grow that the Federal Reserve will halt its tightening cycle during the upcoming FOMC meeting on June 13-14. Dovish sentiments were fueled by higher-than-expected initial jobless claims for the week ending on June 2. According to the CME FedWatch Tool, the probability that the central bank will maintain the fed funds range at 5.00%-5.25% after ten successive rate hikes is now around 72.5%. The dollar retreated alongside declining US yields, with the 10-year note rate dropping nearly nine basis points to 3.718%. Across the pond, despite the Eurozone's first-quarter Gross Domestic Product (GDP) growth of 1% year-over-year falling short of expectations at 1.2%, the euro managed to sustain its gains against the dollar. From a technical perspective, the EUR/USD pair short-term outlook has improved over the last sessions according to indicators on the daily chart, although the bias remains skewed to the downside. Nonetheless, the price has risen above the 20-day simple moving average (SMA) and approaches the next resistance level near the 100-day SMA at 1.0807. Reclaiming the critical level of 1.0900 would be a positive sign. On the downside, support levels can be found at weekly lows around 1.0670, followed by the May monthly low of 1.0635 and the psychological level of 1.0600.
by Alex_Boltyan_FXAnalyst
Gold Challenges Critical Support Level As Dollar StrengthensGold prices edged lower on Wednesday, with the spot XAU/USD approaching a critical short-term support as investors ponder the probability that the US Federal Reserve will pause its tightening cycle when the board meets next week. At the time of writing, the XAU/USD pair is trading at the $1,940/oz area, down over 1% on the day, and challenging the 100-day simple moving average (SMA) support. The Bank of Canada's unexpected benchmark rate hike of 25 basis points on Wednesday has cast doubts about the Federal Reserve's pausing rate hikes. While the odds of no change are still high, they have decreased from over 75% to 64%, according to the CME FedWatch Tool. Earlier this week, the Reserve Bank of Australia also surprised markets with a rate increase against expectations of no change. Hawkish expectations lifted US yields across the curve, supporting the dollar's advance and hence, weighing on the yellow metal and pushing XAU/USD towards the lower end of its May-June range. The 10-year US Treasury note currently yields 3.78%, while the 2-year note offers 4.56%. From a technical perspective, the yellow metal holds a negative short-term bias according to indicators on the daily chart, while the price has fallen below the 20-day SMA and is struggling to sustain above the 100-day SMA, which is acting as a dynamic support level of around $1,940. A break below the latter would add bearish pressure, with gold price targeting the $1,900 area then. On the flip side, the following resistance levels could be found at the 20-day SMA at $1,970 and the $2,000 mark ahead of the record highs in the $2,070-75 zone.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Bounces off Two-Month Lows as Fed Expectations FlipThe EUR/USD pair recovered ground on Thursday after touching its lowest level in over two months the previous day as expectations surrounding the Federal Reserve decision shifted to dovish while investors cheered with optimism the US House of Representatives passing the debt-ceiling bill. At the time of writing, the EUR/USD pair is trading at the 1.0750 zone, up 0.6% on the day and more than 100 pips above Wednesday's two-month low of 1.0635. Market sentiment improved after the US House of Representatives passed the debt-ceiling bill on Wednesday, which now needs the Senate's green light. However, the dollar took the hardest hit from dovish comments from Fed officials. Fed's Governor Philip Jefferson said a pause before more hikes later might allow the economy time to digest current tightening and avoid bank stress. His comments were echoed by Philadelphia Fed President Patrick Harker but defied by Cleveland Fed President, Loretta Mester, who said she saw no "compelling reason" to pause. According to the CME FedWatch Tool, the probability of future rate hikes has flipped from previously showing odds favoring a 25 bps hike in June to over 70% odds the Fed will leave rates unchanged on June 14. On Friday, investors will be watching the US nonfarm payroll report to assess the state of the labor market. From a technical perspective, the EUR/USD pair maintains a negative short-term bias according to indicators on the daily chart, although the bearish momentum has eased a tad. The pair faces the next relevant resistance at the 1.0810-20 area, where the 20-day simple moving average (SMA) converges with the 100-day SMA, threatening to complete a death cross. Beyond that level, the EUR/USD perspective could improve, putting the 1.0900 area back on the radar. On the other hand, the 1.0635 low stands as immediate support, followed by the 1.0600 psychological level.
by Alex_Boltyan_FXAnalyst
Gold Trims Losses After Hitting 10-Week Low Gold price has managed to recover some ground during the New York session on Tuesday, after hitting a two-and-a-half-month low of $1,932 an ounce, as US Treasury yields pull back across the curve. Still, the spot price, XAU/USD, remains 0.45% below its opening price, trading at the $1,960/oz area, Optimism surrounding a debt-ceiling agreement in the United States - which still needs to be approved by Congress - is among key drivers in financial markets as US traders join the trading tables. US Treasury yields are falling sharply, with the 10-year note rate at 3.701%, despite higher expectations the Federal Reserve will embark on another rate hike at the June 14 meeting. According to the CME FedWatch Tool, swap markets are pricing odds above 60% the Fed will raise by 25 basis points next meeting. Upcoming US employment data this week, the ADP report on Thursday and nonfarm payrolls on Friday could affect expectations regarding the central bank's decision. The nonfarm payrolls report is expected to show a 195,000 job gain, while the unemployment rate is foreseen to tick up to 3.5%. From a technical perspective, the XAU/USD pair holds a short-term neutral bias, according to the daily chart, as indicators offer divergent signals while the price has been moving in a range between the 100- and the 20-day simple moving averages (SMAs) for the last couple of weeks. A break below the 100-day SMA, which acted as firm support at the $1,930 area on Tuesday, could add pressure on the metal, targeting the $1,900 zone. On the other hand, a recovery above the 20-day SMA at $1,995 could catalyze a steeper rally aiming for a retest of record highs in the $2,075 region.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Holds Up Above 1.0700 in Low-Volume SessionThe EUR/USD pair continued to edge lower on Monday, although trading ranges are extremely limited given the holiday in the United States and Europe. At the time of writing, the EUR/USD pair is trading at the 1.0710 area, 0.10% below its opening price, posting the fifth daily decline in a row. The dollar retains its strength as the optimism surrounding the achievement of a debt-ceiling deal in the US was offset by expectations that the Federal Reserve will raise interest rates further. US President Joe Biden and House Speaker Kevin McCarthy announced they reached a deal on the debt ceiling late on Sunday. However, the agreement still needs to pass Congress. The CME FedWatch Tool shows the probability of another 25 basis point hike by the Fed is above 58% after the Personal Consumption Expenditures inflation data came stronger than expected on Friday. From a technical perspective, the EUR/USD pair maintains a short-term bearish bias according to indicators on the daily chart, although the negative momentum has eased over the last couple of days. At the same time, the price is trading below a downward-sloped 20-day simple moving average (SMA) and a flat 100-day SMA, which are converging above 1.0800. On the downside, a two-month low of 1.0701 is the immediate support level, followed by a former Fibonacci resistance at 1.0580 and the 1.0500 psychological level. On the upside, the following resistance levels could be found at the 100-day SMA at 1.0815 and the 20-day SMA at 1.0870 ahead of the 1.0900 area.
by Alex_Boltyan_FXAnalyst
Gold Bounces Off Critical Support AreaGold prices edged higher on Friday, bouncing from a two-month low struck the previous day amid optimism US lawmakers will reach a debt-ceiling agreement before the June 1 deadline. At the time of writing, spot gold, XAU/USD, is trading at the $1,947/oz zone, up 0.34% on the day, after bottoming out at the $1,936 area on Thursday. New-born optimism that US lawmakers will secure a debt-ceiling deal before triggering a catastrophic default has weighed on the dollar, supporting a recovery of the yellow metal despite higher-than-expected US inflation figures. On Friday, data showed the US Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, came in hotter than anticipated. The Core PCE price index rose by 0.4% in April while the annual increase was 4.7%, stubbornly higher than the central bank's 2% target. The CME FeWatch Tool now points to higher chances of a 25 basis point rate increase by the Fed on June 14, as coupled with higher-than-expected PCE inflation, the US first-quarter GDP growth was upwardly revised to 1.3% from 1.1% previously estimated. As a result, the probability of a 25 rate increase is now 58.5% from around 48.2% yesterday. Still, US Treasury yields are retreating on Friday, with the 10-year note at 3.81%. From a technical perspective, the XAU/USD pair holds a negative short-term bias, according to indicators on the daily chart, although the bounce from the 100-day simple moving average (SMA) at $1,935 can be seen as constructive in the medium term. On the weekly chart, the perspective remains positive despite the precious metal striking the third consecutive weekly loss. Still, the XAU/USD has managed to hold above the 20-week SMA at around $1,938. A break below this level could deteriorate the medium-term perspective, exposing the $1,900 area. On the other hand, critical short-term resistance is seen in the $1,990-$2,010 range. The metal would need to consolidate above this area to re-shift focus to record highs at $2,075.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Losses as US Debt-Ceiling Impasse Clouds SentimeThe EUR/USD continued to retreat on Thursday as the dollar's rally seems unremittable as the impasse in the US debt-ceiling negotiations weighed on investors' sentiment. At the time of writing, the EUR/USD pair is trading at the 1.0715 zone, 0.35% below its opening price, posting the third daily decline in a row. With US debt-ceiling negotiations in a deadlock, concerns the United States could default and trigger a massive recession are clouding the market's outlook, driving flows into safe havens. Fueling the dollar's rally, data showed the US first-quarter GDP annualized growth was upwardly revised to 1.3% from 1.1% previously estimated. On Friday, the US will release the Personal Consumer Expenditure (PCE) Price Index, the Fed's preferred inflation gauge. The data is expected to show a deceleration of the annual rate to 3.9% in April versus the 4.2% recorded in March. The inflation figures could impact expectations of the Federal Reserve's next decision on June 14. According to the CME FedWatch Tool, probabilities slightly favor an on-hold verdict (51.8%) versus another 25-basis-point hike (48.2%) following FOMC minutes. From a technical standpoint, the EUR/USD maintains a short-term bearish bias according to indicators on the daily chart, while the price heads south and consistently prints lower lows below the 20- and the 100-day simple moving averages (SMAs). A break below the 1.0700 psychological level could pave the way to more losses, targeting the longer-term support at the former Fibonacci resistance at the 1.0580 zone and the 1.0500 mark ahead of the 200-day SMA at 1.0470. On the other hand, the immediate resistance area is seen at the 100-day SMA at the 1.0815 zone, followed by the 1.0900 psychological level.
by Alex_Boltyan_FXAnalyst
Gold Searches For Direction Near Monthly Lows Gold prices edged lower on Wednesday but overall continue to hover within a limited near monthly lows as risk aversion surrounding financial markets benefits the US dollar. At the time of writing, the spot price, XAU/USD, is trading in the $1,960 area, having hit a daily low of $1,956. Still, the yellow metal has entered a consolidative phase after hitting a six-week low of $1,952 last week, capped by the $1,990 area on the upside. The market focus remains on US debt-ceiling negotiations ahead of the June 1 deadline. United States House Speaker Kevin McCarthy (Republican) said in a press conference that they still have disagreements, but he reassured the US will not default and expressed optimism about eventually reaching a deal. On Wednesday, the Federal Reserve published the minutes of the Federal Open Market Committee (FOMC) May 2-3 policy meeting. The document revealed that FOMC members remained split on whether to support more interest rate hikes even though they agreed that inflation was still "unacceptably high." From a technical perspective, the XAU/USD pair maintains a short-term negative bias according to indicators on the daily chart, although the bearish momentum has diluted given the horizontal price action seen over the last few days. A break below the $1,950 level could add pressure on the metal, targeting the 100-day Simple Moving Average (SMA) at the $1,930 and the $1,900 psychological level. On the other hand, a bounce above the $1,990-$2,000 resistance area could improve the short-term perspective, aiming at record highs in the $2,075 region.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst